631654
Description
Flashcards by pamelamossman, updated more than 1 year ago
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Created by pamelamossman
over 11 years ago
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| Question | Answer |
| Start up costs | Costs a business will incur when it firsts sets up e.g. buying equipment |
| Ongoing costs | Costs of running the business e.g. electricity |
| Sales Revenue | The income generated from sales of goods or services. Price x quantity |
| Fixed costs | Any costs that do not vary directly with the level of output e.g. rent |
| Variable costs | Costs that do vary directly with the level of output e.g. raw materials |
| Total variable costs | All the variable costs of producing a specific output level. Variable costs per unit x number of units sold |
| Total costs | This is the sum of fixed and variable costs. |
| Profit | The difference that arises when a firm’s sales revenue exceeds its total costs. Total Revenue – Total costs. Or Total contribution - overheads |
| Break even | The point at which total revenue = total costs. The business does not make a profit, or a loss. Formula = Fixed Costs/Selling Price – Variable cost |
| Cash flow forecast | A detailed estimate of when values of money are expected to flow in and out of the business. |
| Net cash flow | Difference between total inflows and total outflows |
| Profit and Loss Account | A financial statement used to show how a business has performed over a period of time |
| Cost of sales | The cost of producing a product |
| Gross profit | The money made from sales after the cost of sales has been deducted FORMULA: Sales – Cost of Sales |
| Net profit | The money made from gross profit once the expenses have been deducted FORMULA: Gross Profit - Expenses |
| Balance sheet | Financial statement used to show the financial position (the value) of a business at a point in time |
| Fixed assets | Something a business owns, the value of which last more than one year e.g. machinery, equipment |
| Current assets | Something a business owns, the value of which will change within one year e.g. cash, bank, debtors |
| Current liabilities | Something the business owes, the value of which will change within one year e.g. suppliers |
| Long term liabilities | Something the business owes, the value of which lasts more than one year e.g. bank loan |
| Working capital | Current assets – current liabilities |
| Net assets | Fixed assets plus working capital |
| Liquidity | The ability of a firm to meet its short term debts |
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